Salesforce, Inc.CRM
NYQ • Technology
$246.74
P/E
22.41
PEG
0.26
FCF Yield
7.1%
Rev Growth YoY
+10.8% YoY
Gross Margin
76.7%
Health Score
8/10
D/E Ratio
1.02
Confidence
MEDIUM
Business Snapshot
Salesforce is the dominant player in customer relationship management (CRM) software, selling cloud-based subscriptions that help businesses manage sales pipelines, customer service, marketing, and internal workflows. Its revenue comes overwhelmingly from recurring subscription fees across its Sales, Service, Platform, and related cloud segments, which gives it the predictable, high-retention economics typical of enterprise software. With a market capitalisation of $203.07B and TTM revenue of $43.94B, it sits firmly in large-cap territory and is one of the largest pure-play application software vendors in the world. Its defining characteristic is the combination of scale and a sticky subscription model — once a large enterprise embeds Salesforce into its operations, switching costs are high, which underpins the 76.7% gross margin. The company operates in the highly competitive enterprise software market, where it holds a leadership position but faces pressure to keep growing at a rate that justifies its premium multiple.
Financial Health
Gross margin of 76.7% is essentially flat versus 76.9% the prior year, indicating stable pricing power and a durable software cost structure. Net margin (TTM) of 22.0% is healthy for a company of this scale and reflects meaningful profitability rather than growth-at-all-costs spending...
Risk Assessment
- REVENUE DECELERATION — QoQ revenue growth of 1.9% is well below the 10.8% YoY figure, signalling that the growth rate is moderating.
- LIQUIDITY — Current ratio of 0.84x is below 1.0x, meaning current liabilities exceed current assets, which warrants monitoring even if typical for deferred-revenue-heavy software.
- EARNINGS VOLATILITY — Quarterly net income swung from $1.94B to $3.53B across the last four periods, so the 86.9% earnings growth rate reflects a favourable comparison rather than smooth compounding.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- VALUATION MODEL SENSITIVITY — The Python DCF estimate of $370.66 is highly sensitive to terminal growth, with a 0.5% change moving fair value by 15-25%, so the 33% discount to current price carries wide uncertainty.
- GROWTH — Revenue growth of 10.8% YoY is modest for a software company and may not sustain a premium multiple if it decelerates further....
Gross margin of 76.7% is essentially flat versus 76.9% the prior year, indicating stable pricing power and a durable software cost structure. Net margin (TTM) of 22.0% is healthy for a company of this scale and reflects meaningful profitability rather than growth-at-all-costs spending. The balance sheet is solid but not fortress-like: debt/equity of 1.02x is manageable, though a current ratio of 0.84x means current liabilities slightly exceed current assets, a common feature of software firms that carry large deferred revenue balances. Free cash flow of $14.40B against a $203.07B market cap produces an FCF yield of 7.1%, a genuinely strong cash generation profile that signals the business funds itself comfortably. Return on equity of 19.4% confirms efficient use of shareholder capital. Overall, this is a financially healthy company with ample cash generation to fund reinvestment, buybacks, or dividends without meaningful dilution risk.
- REVENUE DECELERATION — QoQ revenue growth of 1.9% is well below the 10.8% YoY figure, signalling that the growth rate is moderating. - LIQUIDITY — Current ratio of 0.84x is below 1.0x, meaning current liabilities exceed current assets, which warrants monitoring even if typical for deferred-revenue-heavy software. - EARNINGS VOLATILITY — Quarterly net income swung from $1.94B to $3.53B across the last four periods, so the 86.9% earnings growth rate reflects a favourable comparison rather than smooth compounding. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed. - VALUATION MODEL SENSITIVITY — The Python DCF estimate of $370.66 is highly sensitive to terminal growth, with a 0.5% change moving fair value by 15-25%, so the 33% discount to current price carries wide uncertainty. - GROWTH — Revenue growth of 10.8% YoY is modest for a software company and may not sustain a premium multiple if it decelerates further.
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